Three 2012 Holiday Online Shopping Trends to Follow in 2013

Another holiday shopping season has passed, offering yet another glimpse into what an e-commerce-driven retail sector looks like. The explosive growth of e-commerce has emerged as a headline from every holiday shopping season for more than a decade, but 2012 was a watershed year for retailers and the customers they serve. New trends in consumer behavior and the latest measures of retail performance suggest that 2012 was a healthy online holiday shopping season and that these economic tailwinds may continue in 2013.

Annual growth among online retailers continued to outpace the growth seen by brick-and-mortar merchants during the 2012 holiday season. In fact, year-over-year growth in both sales and transaction volume was more than three times higher among e-commerce retailers, according to our Chase Holiday Pulse, which aggregates payment processing data from 50 of the largest U.S. e-commerce merchants. Retailers experienced a continued downward trend in average ticket prices, with season-to-date prices down nearly 8 percent compared to last year. This dichotomy between a rise in sales volume and a decline in ticket prices is a pattern to watch in the year ahead.

Behind all of these numbers are three trends to follow this year.

First, the 2012 holiday shopping season was the initial year e-commerce retailers witnessed the “Online Shopping Continuum,” where typical peak shopping days — such as Black Friday, Cyber Monday and even Christmas Eve, which continue to be significant moments for brick-and-mortar merchants — morphed into a week-long phenomenon. During the week following Black Friday, for instance, retailers saw strong online sales volume growth, powered by additional incentives on the days following Cyber Monday, such as time-sensitive, around-the-clock coupons and special offers. This is a continuation of the urgency mechanism that many retailers implement during key shopping days.

What had traditionally been secluded to a 24-hour period became week-long shopping, dubbed “Cyber Week.” For the seven-day period after Black Friday, the Chase Holiday Pulse revealed that year-over-year sales increased by nearly 23 percent. This could be a contributing factor to the continued decline in average ticket prices as consumers are shopping more frequently, purchasing in increments rather than in bulk, purchasing fewer or less expensive items or taking advantage of extended promotions. Interestingly, consumer spending tapered down the weekend following Cyber Week, with year-over-year sales growth rates declining by nearly 18 percent.

The Chase Holiday Pulse also reported 38 percent sales growth between Black Friday and Cyber Monday, potentially fueled by extended retailer price reductions and the rise of mobile commerce that provided more flexible real-time shopping over the weekend.

Second, we saw a rise in online sales during what the analysts called “Green Week” (Dec. 10-17), which was the busiest seven-day period of the holiday shopping season in terms of transaction volume this year. Online merchants saw high shopping volume — year-over-year sales and transaction for the same period were up nearly 11 percent and 17 percent respectively — throughout the week as responsible consumers acted to utilize free delivery offers before the holidays.

Finally, the powerful comparison shopping behavior known as “showrooming” played an outsized role thanks to the growth of the mobile smartphone. Showrooming, which is when consumers use brick-and-mortar stores to survey and compare products and then ultimately buy those products online through a phone, tablet or computer, potentially from a competitor, has pushed retailers to match online prices and enhance their in-store customer service. But there’s no reason to believe this phenomenon is a passing fad. Forty-three percent of U.S. adults admitted to participating in showrooming, according to a November 2012 poll from Harris Interactive.

The conclusion of the 2012 holiday shopping season suggests continued demand for e-commerce shopping in 2013. Continued growth in both sales and transaction volume, driven by extended periods of strong sales, the increased use of mobile technology and the emergence of showrooming, made for a record season for online retailers across the country. The aggregated power of these trends helped drive the 2012 holiday shopping season. As the online retail industry continues to grow — adapting to new technology trends and consumer behaviors — there is reason to be optimistic for a healthy economy in 2013.

Chase Paymentech, a subsidiary of J.P. Morgan Chase (JPMC), is a leading provider of payment processing and merchant acquiring. The company’s proprietary platforms enable integrated solutions for all payment types, including credit, debit, prepaid stored value and electronic check processing, as well as digital, alternative and mobile payment options. In 2011, Chase Paymentech processed 24.4 billion transactions with a value of $553.7 billion, including an estimated half of all global Internet transactions.

About Voices

Along with original content and posts from across the Dow Jones network, this section of AllThingsD includes Must-Reads From Other Websites — pieces we’ve read, discussions we’ve followed, stuff we like. Six posts from external sites are included here each weekday, but we only run the headlines. We link to the original sites for the rest. These posts are explicitly labeled, so it’s clear that the content comes from other websites, and for clarity’s sake, all outside posts run against a pink background.

We also solicit original full-length posts and accept some unsolicited submissions.

AllThingsD by Writer

AllThingsD.com is a Web site devoted to news, analysis and opinion on technology, the Internet and media. But it is different from other sites in this space. It is a fusion of different media styles, different topics, different formats and different sources. Read more »